Courage is Not the Absence of Fear In Mountaineering (Investing Too!)

Posted: June 28, 2022

Category: Behavioral Finance

Climbers ascending a mountain

A friend recently convinced me to watch a new(ish) Netflix documentary, “14 Peaks: Nothing is Impossible.” It follows a Nepalese mountaineer who attempts to climb all 14 of the world’s peaks higher than 8,000 meters in less than seven months.

Even a non-climber like me can appreciate that the endeavor undertaken by the film’s star, Nirmal Purja, was impressive. But what put the feat into context for me was when I learned that the previous record was also around seven – but YEARS, a little more than seven years.

As I watched, I couldn’t help but consider the parallels between climbing and investing. While the latter does not carry the immediate life and death consequences of mountaineering, it does have life-altering impacts if not handled appropriately. Both activities are also adversely affected by emotion. In fact, our biological engineering toward risk avoidance can work against us.

‘Fear Is Always In You’

14 Peaks” was fascinating on many fronts, and I would highly recommend it. One word of caution though: If you are afraid of heights, you might consider enjoying it with someone or something to calm your nerves, as the breathtaking visuals are…intense.

Besides the stunning views and cinematography, I was struck by the candid view Nirmal provides about what it takes to accomplish something as truly unique and daunting as summiting the most dangerous mountains in the world. In short, his laser-focus on the end goal and trust in his team allowed him to overcome the doubts or fear.

“Fear is always in you,” said Italian climber Reinhold Messner, who was interviewed in the documentary because he was the first person to achieve the same goal (he took significantly more time, 16 years, which in my book doesn’t take away from the impressiveness).

Something that seemed to help Nirmal compartmentalize fear was his confidence in his partners. “I knew that I had the best team in the world,” he said. He even shared some of the group’s diverse strengths. I was entertained to hear a balance between traits critical to reaching the summit of a giant piece of rock (like the team member Nirmal said “can carry the size of a house”) and attributes that probably matter more while waiting for a good weather window at basecamp (one team member “is the best dancer on the plant,” supposedly).

Getting a Grip on Emotions

In thinking about the parallels to the experience of investing, particularly during turbulent market environments, this quote from Reinhold’s interview in the film grabbed me:

“People today, if you ask them, ‘Why you go to the high peaks?’ They say, ‘Because it’s fun.’ I don’t believe them. It’s not fun. It’s a place where you have to learn to cope with pain because it’s painful.”

Watching the market drop 20% or scrolling through headlines that scream “bear market” and “stock market crash” doesn’t bring the same physical pain mountaineers knows, but the emotional stress is profound. It’s basic behavioral finance.

So, what is the remedy? Similar to Nirmal, who stayed laser-focused on his end goal and confidently trusted his team, at Blueprint Investment Partners, we believe in optimizing for behavioral finance through planning and preparation. Our attention is fixed on the long game of supporting financial advisors who are helping clients develop and stay anchored to financial plans capable of preserving compounding. We also trust that our systematic investing process will unemotionally tell us what, when, and how much to buy and sell in any market environment.

Over time and with experience, we have enlarged our comfort zone to the point we are able execute our process boldly in the face of uncertainty and discomfort to help advisors meet their clients’ goals. For example, we have a stoic way of looking at market declines, recognizing that there are three distinct phases that lead to a bear market, and not all demand action.

Investing and climbing can both involve fear, but achieving goals in either area usually means accepting some level of risk. It’s about finding the right tools to compartmentalize emotions with preparation, discipline, and a solid team.

Let's Talk

If you’d like to learn more about how Blueprint seeks to optimize our strategies for behavioral finance